The Pentagon is "absolutely" right to mandate more accountability in defense acquisition, ITT Chairman and CEO Steve Loranger believes. But he also says aerospace and defense profit margins are not out of line in the business world. Loranger, who was invited to a late-July meeting between Defense Secretary Robert Gates and industry chief executives, says he knows of no formal effort targeting A&D profits, but initiatives like pushing fixed-price contracting and greater government oversight of program performance could eat into the sector's historic profitability.
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